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发帖数: 38 | 1 Howdy Redfinnians!
It's time for the monthly round-up of everything that moved in the real
estate market! The short story is that the real estate market is stagnant,
mostly because home-buyers can't get credit, and sellers can't get enough
money for their house to pay off the bank.
The Case-Shiller index published on Tuesday showed home prices increasing
across the board in May 2010:
Metro AreaMoM ChangeYoY ChangeDate of MaxChange from MaxPrices Last at This
Level in...Consec. Mos.
of Increase
Phoenix1.4%6.3%Jun-06-51.2%Sep-012
LA2.4%9.6%Sep-06-36.2%Dec-032
San Diego1.8%12.9%Nov-05-34.8%May-0313
Bay Area4.0%20.0%May-06-34.9%Aug-023
DC3.8%8.8%May-06-27.5%Apr-042
Atlanta3.9%2.3%Jul-07-21.0%Mar-012
Chicago1.8%-0.4%Sep-06-27.7%Jun-022
Boston3.0%6.5%Sep-05-14.5%Aug-032
New York0.6%-0.1%Jun-06-21.0%Apr-041
Portland3.0%0.8%Jul-07-20.7%May-052
Seattle2.2%-1.7%Jul-07-23.7%Apr-053
20 City2.1%5.1%Jul-06-29.1%Sep-032
But that doesn't tell the story of what has happened since then: sales
volume for existing homes declined 5.1% in June, and we believe prices in
most markets are now stagnant or declining. We particularly worry that
California prices are over-heating: annual increases of 13% in San Diego and
20% in the Bay Area don't seem sustainable.
But a lot has changed since May, which Case-Shiller hasn't accounted for yet
. Sales have been declining due to a hangover from the federal tax credit
that expired April 30. Tax-credit deals were still closing in May, but not
many in June.
New Home Sales Bounce 24%
We argued last month the hangover will last all year, there has been some
positive news: the number of new contracts signed by home-builders bounced
from an apocalyptic low in May, to increase by 24% in June. Since new-
construction contracts take months to close, this increase is an early
indicator that demand isn't in free-fall. That said, we'd feel even better
about it if the Commerce Department didn't have a habit of lowering each
month's estimate in a subsequent re-statement.
A Lull in Closings, But Early-Stage Demand at Redfin Stronger Than Ever
In our business, the number of customers signing offers is down 40% from one
frenzied week during the tax-credit peak, but up 6% compared to the last
four weeks. What's surprising is that the number of folks touring properties
is at historic highs -- normally this late in the summer, early-stage
activity begins to decline. The buyers we're working with now are in no rush
, so demand will take a while to recover.
Many of our more languid buyers complain that the quality of listings on the
market just isn't that great, mostly leftovers from whatever didn't sell
this spring. We're certainly seeing sellers making more concessions at the
inspection, so long as you get a contractor to provide a reliable estimate.
But we're also putting more listings on the market than ever, also unusual
this late in the season.
Foreclosures Continue to Decline: Have Banks Lost Their Nerve?
Another reason listing quality will improve is that foreclosures, while
still high by any historical standard, have begun to decline, with a 3% drop
in foreclosure filings from May to June. This data is also mixed, with
increases in some states as others decline, and conflicting claims from
different data providers about the nationwide trend. What we have noticed is
that even when there is a foreclosure filing, banks aren't always going
through with it, instead encouraging troubled borrowers to sell their own
home in a short sale. In Seattle for example, June foreclosure filings
increased, but much faster than foreclosure auctions. We've also noticed
anecdotally, that the historically miniscule number of borrowers who worked
out a payment plan with lenders has modestly increased.
It will take us years to work through the supply of foreclosed homes -- and
years for sellers who want to sell to see prices that will allow them to pay
off their mortgage -- this will slow a recovery, but long-term we think we'
re beyond the hemorrhagic increases in distressed inventory that drove the
big price drops in the market.
Buyers Can't Get Credit
The problem now is fewer buyers. Unemployment is nearly 10%. And even though
money is cheap, most people can't get it. It will be years before folks who
've gone through a foreclosure or short-sale will be able to borrow again,
and lenders are punishing borrowers with a credit score below 740. Cash
investors are responsible for more activity than usual, exploiting what is
essentially a credit arbitrage opportunity in the low-end market, getting
bargains because many of their would-be competitors don't qualify for a loan
.
Interest Rates Still Low
Until a lot of consumers jump into the market, we won't see any major price
increases. Many folks in the real estate industry believe that nobody will
get off the dime until mortgage interest rates take their first nasty jump.
Last week, rates reached historic lows of 4.56%: |
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